Mega Conglomerate Willing to Buy Major Stakes in Dewan Cement

BMA capital management limited has informed Pakistan stock exchange (PSX) in a notice that, Mega conglomerate Private limited is willing to acquire the major stake in Dewan Cement. According to BMA capital, mega-conglomerate will acquire 87.5% share of Dewan Cements out of total and it equals to 424 million shares. MCPL out businesses in dairy and real estate sector and it is based in Karachi, Pakistan. In last fiscal year, it had realized a net profit of Rs.1.30 billion.

PSX had also warned Dewan cement to rectify the reservations raised by exchange the trading in company’s stock would be halted. And it was given a time frame of two weeks. Also, if the company didn’t respond effectively, dewan cement would be placed in defaulters list.

On Wednesday Dewan’s shares were up by 2.9% despite the bearish trend that brought KSE-100 index down 184 points. The stock exchange has also placed the Dewan cement in the normal segment as early being in defaulters list.

Dewan was in the news for quite long to be for sale and many companies are interested in buying stakes in Dewan. The lucky and Fecto cement of China were also keenly desiring to acquire the stake in the company. Local cement giants are interested in buying shares in Dewan and when in 2016 a Chinese company was entirely willing to buy stakes in Dewan it rippled anxiousness among local players as they don’t want to lose their market share.

Dewan Cements is producing at 6.1% (2.88 million tons) of total capacity i.e. 46.94 million tons and has units in Khyber-Pakhtunkhwa and Sindh namely Pakland and Saadi respectively.

Plants of Dewan cement need upgrading as they are old and new investor will probably install new plants and it will consume around three years before the new plant start operations. Also, the domestic demand is increasing for the cement thereby, pushing cement companies to expand their operations.